A key presentation by a consultant from Rafelis Financial Consultants examined the city’s reclaimed water system, which serves approximately 2,900 accounts. Operating expenses for the reclaimed water system have reportedly increased by 16% annually since fiscal year 2021, and they are projected to climb further, reaching approximately $1.3 million by 2026. An inadequacy in the current rate structure was highlighted, with the system’s existing revenue unable to meet financial demands. As a result, proposed rate adjustments suggest a 50% increase in fiscal year 2027, followed by annual hikes of 8% from 2028 to 2031, more than doubling the base service fee by 2031.

The stormwater system analysis presented a similar picture, with approximately 7,700 parcels translating to around 77,130 equivalent residential units. Although annual revenues are expected to remain stable at $1.4 million through 2030, operating expenses have been rising, averaging a 7.7% increase annually since 2021. The capital improvement program estimates a total of just under $141 million, with a portion linked to the resiliency fund. Existing debt is set to be paid off by 2030, but new debt payments are projected to commence. The proposed rate adjustments could see increases as high as 15% for the first three fiscal years, with a cumulative rise of under 73% by 2031.

The wastewater system was also under scrutiny, serving around 3,600 accounts. Current revenue projections remain stable at about $8.1 million through 2026, but operating costs are rising, anticipated to escalate from $7.3 million in 2026 to approximately $8.7 million by 2029. With substantial capital plans of $58.4 million, the system requires significant funding for key projects. Proposed rate adjustments aim to phase in over three years.

The discussion revealed that the current rate structure imposes a heavier financial burden on commercial accounts, particularly those with smaller meter sizes. Proposed changes could raise costs for these businesses, potentially tripling their wastewater expenses. Suggestions were made to adjust base rates for smaller meters to alleviate the financial burden on local enterprises.

The commission also examined the city’s financial health, particularly regarding underfunding in comparison to neighboring municipalities. Concerns were expressed about the city’s ability to fund necessary capital projects, with over $100 million in stormwater projects identified as needing attention. The necessity for a rate study to account for new infrastructure costs was emphasized, with the existing study focusing only on maintaining current facilities.

Further financial discussions addressed potential changes to the millage rate and utility fees. The finance director presented an overview of ad valorem property taxes, noting that revenue growth has been due to rising taxable values rather than rate increases. A new Senate bill could reduce ad valorem revenues, prompting considerations for millage rate adjustments. The finance committee recommended raising the millage rates to address underfunding and restore financial stability, citing the impact of recent storms on the city’s savings.